Just like FDs, interest payment on corporate FDs is fully taxable at your income tax slab rate, so factor in the post-tax returns
Company fixed deposits (FDs) or corporate FDs are popular among investors who want fixed returns that are slightly higher than what bank FDs give, even if it is at a slightly higher risk. However, just like FDs, interest payment on corporate FDs is fully taxable at your income tax slab rate, so factor in the post-tax returns. Mint does not recommend corporate FDs to average investors because of the risk involved. But if you would like to invest in them anyway, you should minimize the risk by choosing issuers with high ratings. An AA rating indicates that the degree of safety regarding timely payment is strong. The higher the rating, the better the risk capacity of the issuer. Also, make sure the terms of premature redemption are not very stringent. Here's a list of corporate FDs that are rated AA and above.